Your directors are pleased to present the Sixteenth Annual Report along with theAudited Accounts on the business and operations of the Company for the financial yearended 31st March 2011.
Our Financial Highlights:-
The Companys performance during the year is summarized below:-
Rs. In Lakhs
|PARTICULARS ||Year ended March 31, 2011 ||Year ended March 31, 2010 |
|Total Income ||20760.54 ||17184.60 |
|Profit before Depreciation, Interest and Taxation (PBDIT) ||5422.26 ||3948.44 |
|Less: Depreciation ||1601.29 ||1417.41 |
|Less: Interest ||113.03 ||369.99 |
|Profit Before Tax ||3707.94 ||2161.04 |
|Less: Income Tax Paid & Provisions Made ||991.27 ||802.63 |
|Profit after Tax ||2716.67 ||1358.41 |
|Add : Profit brought forward from previous year ||5749.65 ||5031.00 |
|Profit available for appropriation ||8466.32 ||6389.41 |
|Less: - Transfer to General Reserve ||271.67 ||150.00 |
|- Dividend ||560.00 ||420.00 |
|Dividend Tax ||94.65 ||69.76 |
|Profits carried forward to the following year ||7540.00 ||5749.65 |
During the year 2010-11, the board of directors declared an interim dividend of Rs. 2/-equity share amounting to Rs.280 lacs on 12th February, 2011 the same has already beenpaid. In addition, now your Board of Directors recommended a final dividend of Rs.2/-equity share amounting to Rs. 280 lacs subject to the approval of shareholders at theensuing Annual General Meeting. The Dividend will be paid in compliance with applicableprovisions of the Companies Act, 1956 and Regulations made there under.
Transfer to Reserves
Your Company has transferred a sum Rs. 271.67 Lakhs to the General Reserve being 10% ofthe current years profit in compliance with Companies (Transfer of Profits toReserves) Rules, 1975.
Your Company is engaged in the business of manufacturing automobile sealing systems& exterior products, profiles for white goods industry and mainline power distributionsystem. The product range includes weather strips, trim door opening, windshield molding,roof molding, quarter window seal, A-pillar garnish, B-pillar garnish, skirt air damper,body side molding etc. Additionally, the Company manufactures PVC based customizedprofiles for white goods and other industries and power distribution system for varioususes.
Client list of the Company includes Maruti Suzuki India Limited, Honda SIEL Cars IndiaLimited, General Motors India Limited, Toyota Kirloskar Motors India Limited, NissanMotors India (P) Limited and Tata Motors Limited. Your Company has a technicalcollaboration with Tokai Kogyo Co. Ltd (TKCL), Japan and Nissen Chemitec Corporation,Japan to manufacture automobile products. In the white goods industry, your companymanufacture and supply customized profiles to Godrej, Voltas, Videocon and CarrierRefrigerators.
Your Company has achieved Total Sales (net of excise) of Rs. 201.89 Crores in theFinancial Year ended 31st March, 2011 as against Rs.170.48 Crores in the previous year.For the fiscal 2010- 2011 our EBIDTA has increased to Rs. 5422.26 Lacs from Rs.3948.44Lacs in fiscal 2009.10. Profit after tax for 2010-11 is Rs. 2716.67 lacs as compared toRs. 1358.41 Lacs in 2009-10. Highlights of performance are discussed in detail in theManagement Discussion and Analysis Report attached to this Report.
The year 2011 was unique for the Indian auto industry. The production data of theIndian Automobile Industry for April-March 2011 recorded a growth of 27.45 percent oversame period last year.
The Indian automobile industry may not be able to maintain the growth rates registeredin the last two years. The high base effect of 2010, the firming up of interest rates andcrude oil price change may affect the growth rates in future. The Tsunami, earthquake,disasters in Japan has affected the production of many automotive companies as they wereunable to get parts from the suppliers affected by the catastrophe.
The challenges, the automobile industry in the Indian market will face are stableeconomic environment, healthy IIP growth, favorable liquidity and availability of finance.Other things that would affect the Indian automobile industry include road networkdevelopment activities, strong growth in construction activities and the expected healthyperformance of the industrial sector.
The competition in all car segments would be severe with the launch of new models bymany Automobile manufacturers like Toyota, Honda, Maruti Suzuki, General Motors, VW, BMWetc.
The commodity prices are rising which will be putting the pressure on margins of theAutomobile manufacturers leading to severe pressure on margins of the Auto componentindustry.
There is no other material change affecting the affairs of the Company, which hashappened between the date of the Balance Sheet and up to the date of this report.
The Company has not invited or accepted any Fixed Deposits from Public in terms ofprovision of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance ofDeposits) Rules, 1975.
M/s. Dharam Taneja Associates, Chartered Accountants, Statutory Auditors of theCompany, will retire at the ensuing Annual General Meeting and are eligible forre-appointment. Your Directors have recommended the reappointment of M/s. Dharam TanejaAssociates, Chartered Accountants as Statutory Auditors of the Company.
The Audit Committee and your Board recommend their reappointment as Statutory Auditorsof the Company.
There are no adverse remarks in the Auditors Report which need to be discussed.
The Audit Committee consists of six members namely Mr. Kaushal Kumar Mathur, Mr. BrijBehari Tandon, Mr. Ashok Agarwal, Mr. Surender Kumar Tuteja, Mr. S. C Jain and Mr. AjayKumar Jain out of which four are independent and two are executive directors. Mr. KaushalKumar Mathur is the Chairman of Audit Committee. All members of the Audit Committeepossess sufficient knowledge and experience in the field of Finance and Accounts.
Mr. Devendra Chandra Jain, Mr. B.B. Tondon, and Mr. Anuj Jain , Directors of theCompany shall be retiring by rotation in accordance with the provisions of Section 255 and256 of the Companies Act, 1956 read with Articles of Association of your Company, andbeing eligible, offer themselves for re-appointment as the Directors of the Company.
Brief resume of the Directors proposed to be re-appointed and other details asstipulated under Clause 49 of the Listing Agreement are provided in the Notice forconvening the Annual General Meeting.
Directors Responsibility Statement
In Compliance of Section 217(2AA) of the Companies Act, 1956 as amended by theCompanies Amendment Act, 2000, the Directors of your Company subject to notes appended toaccounts and auditors report confirm that:
(1) In preparation of Annual Accounts for the financial year ended 31st March, 2011,the applicable Accounting Standards read with requirements set out under Schedule VI tothe Companies Act, 1956, have been followed and there are no material departures from thesame;
(2) Such accounting policies have been selected and applied consistently and made suchjudgments and estimates that are reasonable and prudent so as to give true and fair viewof the state of affairs of the Company at the end of the financial year 31st March, 2011and of the Profit of the Company for the said year;
(3) Proper and sufficient care has been taken for the maintenance of adequateaccounting records, in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; and
(4) The Annual Accounts of the Company for the year ended 31st March, 2011 have beenprepared on a going concern basis.
Management Discussion and Analysis Report
Management Discussion and Analysis Report, as required under the Listing Agreementswith the Stock Exchanges, is attached to this Report.
Precision Pipes And Profiles Company Limited has been proactive in following theprinciples and practices of Good Corporate Governance. The Company to its best endeavorcomplies with all the aspects in letter and spirit of Corporate Governance Practices.
Pursuant to Clause 49 of the Listing Agreement of the Stock Exchanges, the report onCorporate Governance and Management Discussion & Analysis Report have been included inthis Annual Report as a separate section and forms part of the Directors Report along withthe Auditors Certificate.
The Company enjoyed cordial relations with the employees during the year under reviewand the management appreciates the employees of all cadres for their dedicated services tothe Company.
Listing of the Company
The Equity Shares of Precision Pipes and Profiles Company Limited are listed and aretraded on the following stock Exchanges:-
National Stock Exchange of India Limited ("NSE")
Exchange Plaza, Bandra Kurla Complex,
Bandra (east), Mumbai- 400051.
Code: - 532934/PPAP
Bombay Stock Exchange Limited ("BSE")
Phiroze Jeejeebhoy towers
Dalal Street, Mumbai-400001
Code: - 532934
Your Company is regular in paying Listing Fees. The Annual Listing Fee for the Year20011-12 has been paid within the scheduled time to NSE and BSE.
Energy Conservation, Technology Absorption And Research & Development And ForeignExchange Earnings And Outgo
The particulars in respect of Energy Conservation are not applicable to your Company interms of Section 217(1) (e) read with Companies (Disclosure of Particulars in the Reportof Board of Directors) Rules, 1988.
Technology Absorption and Research & Development
As required under Rule 2 of the Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules, 1988, the particulars relating to Technology Absorption andResearch and Development as per Form B are given in Annexure A attachedhereto, which forms a part of this Directors Report.
Foreign Exchange Earnings and Outgo
The details of Foreign Exchange Earnings and Foreign Exchange Outgo during the year aregiven below:
|Particulars ||Current Year 2010-11 ||Previous Year 2009-10 |
| ||(Rs. in lacs) ||(Rs. in lacs) |
|Foreign Exchange Earning || || |
|(a) Export ||565.74 ||180.28 |
|Foreign Exchange Outgo || || |
|(a) Payment to Collaborators ||249.81 ||55.15 |
|(b) Directors/ Employees Visit abroad ||32.71 ||15.71 |
|(c) Raw Materials & Consumable Stores ||5440.91 ||4104.67 |
|(d) Machinery, Dies & Moulds ||409.61 ||643.84 |
|(e) Dividend ||11.25 ||4.50 |
|(f) Interest on ECB ||13.16 ||21.95 |
The Company is not involved in any type of operations hazardous to environment and doesnot discharge any trade effluents (solid, liquid or gaseous) causing pollution. TheCompany adheres to the provisions of environmental laws. Our Unit I is ISO 9001 and 14001certified from B.S.I Management System, London and all other units are QS ISO 14001certificate holders from TUV Management Service GmbH, TS 16949 Certificate holders fromAIB Vinocotte, Belgium & OHSAS 18001 from TUV Management Services GmbH. Ouroperations do not generate effluents.
Particulars of Employees
None of the employee of the Company is in receipt of the salary exceeding the limits ofRs. 60,00,000/- per annum or Rs. 5,00,000/- per month as specified by Section 217(2A) ofthe Companies Act, 1956 read with the Companies ( Particulars of Employees ) Rules, 1975as amended by Companies ( Particulars of Employees ) Rules, 2011.
Your Directors take this opportunity to gratefully acknowledge the co- operation andassistance extended by the valued customers of the Company, M/s Tokai Kogyo Co. Ltd.,Japan, and Nissen Chemitec Corporation Japan our Technical Collaborators, Government ofIndia and Companys Bankers for their continued support and guidance. The Directorscommend the continued commitment and dedication of employees at all levels. The Directorsalso wish to acknowledge with thanks all other stakeholders for their valuable sustainedsupport and encouragement. It is this unity of purpose that breeds success and yourDirectors look forward to receiving similar support and encouragement in the years ahead.
| ||On behalf of the Board of Directors || |
| ||For PRECISION PIPES & PROFILES COMPANY LIMITED || |
| ||Sharat Chand Jain ||Ajay Kumar Jain |
| ||(Executive Vice Chairman) ||(Managing Director) |
|Dated: 5th August 2011 || || |
|Place: New Delhi || || |
ANNEXURE TO DIRECTORS REPORT
|ANNEXURE-A || |
|FORM B || |
|See Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988. || |
|Form for Disclosure of Particulars with respect to Absorption 2010-11 || |
|Research and Development (R & D) || |
|1. Specific areas in which R & D carried out by the . Company ||: Optimizing the process parameters for improvement in yield and quality of profiles manufactured by the Company, which are as per specific designs of the buyers. |
|2. Benefits derived as a result of the above R & D ||: Improvement in the product quality as per specifications and improvement in its longevity/ durability. |
|3. Future plan of action ||: To maintain the above. |
|4. Expenditure on R & D || |
|(a) Capital ||: N.A. |
|(b) Recurring ||: N A |
|(c) Total ||: N A |
|(d) Total R & D expenditure as a percentage of total turnover ||: N A |
|Technology Absorption, Adaptation and Innovation || |
|1. Efforts, in brief, made towards Technology, Absorption, Adaptation and Innovation. ||: Progress was made during the year in up gradation of technology of PVC Profiles |
|2. Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development. ||: Development of Industry specific special PVC Profiles through Collaboration Agreement has resulted in Import Substitution whereupon product quality & its yield have improved. |
|3. In case of imported technology (imported during the last || |
|5 years reckoned from the beginning of the financial year), following information may be furnished: || |
|(a) Technology Imported ||: PVC Profiles for Automobile Industry from M/s. Tokai Kogyo Co Ltd., Japan. |
| ||Interior and Exterior Injection Molded Product from M/s. Nissen Chemitec Corporation, Japan |
|(b) Year of Import ||: a) M/s Tokai Kogyo Co Ltd., Japan. Originally in the year 1989 and renewed in 1995, 2000, 2005 and also in the year 2010 for the further period of five years. |
| ||b) M/s. Nissen Chemitec Corporation, Japan Since 2007 |
|(c) Has technology been fully absorbed? ||: Yes |
|(d) If not fully absorbed, areas where this has not taken place, reasons thereof and future plans of action. ||: N.A. |
| ||On behalf of the Board of Directors || |
| ||For PRECISION PIPES & PROFILES COMPANY LIMITED || |
|Dated: 5th August 2011 ||Sharat Chand Jain ||Ajay Kumar Jain |
|Place: New Delhi ||(Executive Vice Chairman) ||(Managing Director) |